Retail posts unexpected growth in February

March 05, 2010

LOS ANGELES — The retail industry's slow but steady recovery picked up in February, with merchants posting the best sales results in more than two years.

Despite severe snowstorms in the East, shoppers still turned out at the nation's malls to buy spring merchandise and other goods, helping retailers report a 4 percent year-over-year sales increase last month, according to Thomson Reuters' tally of 28 major chains. It was the strongest gain since November 2007, a month before the recession began, and the sixth consecutive month of increases.

With the exception of drugstores, every sector did better than predicted, Thomson Reuters said. Of individual retailers, more than three-fourths outperformed expectations, including Ross Stores Inc., Nordstrom Inc. and Abercrombie & Fitch Co.

"Given the snowstorms and barrage of negative economic data last week, it was a bit of a surprise how strong the sales were this month," said Ken Perkins, president of research company Retail Metrics Inc.

Industry watchers cautioned that results are being helped by weak year-ago sales. And economic problems persist that could hamper consumer spending, including mixed housing and commerce reports released Thursday and news about the nation's unemployment picture due today.

"Although some numbers are certainly very good, they're inflated or helped along by very weak sales a year ago," said Kamalesh Rao, director of economic research at SpendingPulse, an information service of MasterCard Advisors, which also tracks retail spending.